Tariff-driven price hikes are making their way into department stores. This week, Macy’s CEO Tony Spring—whose company also owns Bloomingdale’s and the cosmetics chain Bluemercury—said rising costs tied to tariffs will soon impact prices across select product categories. His comments followed similar warnings from Walmart, Target and Nike, whose business relies heavily on Chinese manufacturing.

Macy’s sources about 20 percent of its merchandise from China. “There are going to be items that are the same price as they were a year ago. There [are] going to be, selectively, items that may be more expensive, and there are items that we might not carry because the pricing doesn’t merit the quality or the perceived value by the consumer,” Spring told CNBC after reporting quarterly earnings on May 28.

Spring emphasized that price increases would be confined to specific brands and categories where customers still perceive strong value. He also noted that Macy’s is actively reducing its exposure to Chinese imports by renegotiating supplier contracts and canceling or delaying orders that no longer meet the company’s value criteria.

For the quarter ending May 3, Macy’s reported a 5 percent year-over-year revenue decline to $4.6 billion, with net income falling to $38 million from $62 million the previous year. The company expects tariffs to slightly erode its gross margin in fiscal 2025.

Earlier this month, Nordstrom—one of Macy’s chief competitors—completed a $4 billion sale to Mexican retail group El Puerto de Liverpool. The deal, first announced in December 2024, faced delays due to tariff-related uncertainty but ultimately closed.

“Department stores may continue to see pressure on profit margins, weakened competitiveness compared to e-commerce players with more flexible supply chains and increased operational complexity,” William London, an international business attorney and partner at California-based Kimura London & White LLP, told Observer. He noted that executives citing tariffs are not just highlighting cost increases, but also the broader strategic volatility they introduce into global sourcing.

“Now may be the ideal moment to introduce more U.S.-made alternatives that aren’t vulnerable to tariff fluctuations,” said Liya Getachew, principal at Sendero Consulting, who specializes in manufacturing, consumer-packaged goods and supply chain operations. She added that retailers must now strike a careful balance between maintaining customer loyalty and building supply chain resilience.

Concerns around tariffs are mounting across the retail sector. Earlier in May, Walmart CEO Douglas McMillon told analysts that despite efforts to shield shoppers from rising costs, the scale of the tariffs makes it difficult to absorb the full impact. Walmart has already raised prices on certain items.

Target CEO Brian Cornell has also flagged “massive potential costs” from tariffs but said price increases would remain a “very last resort.”